The figure below shows revenue and cost curves of a natural monopoly firm.Figure 14.1

In the figure,
D: Demand curve
MR: Marginal revenue curve
MC: Marginal cost curve
ATC: Average total cost curve
-Which of the following is an example of the opportunity cost involved with social regulation?
A)The monetary costs of hiring administrative assistants to fill out OSHA safety reports
B)The environmental costs of pollution control required under the Clean Air Act
C)The monetary costs of laboratory trials required to try out a new drug
D)The lives that are lost because new drugs are not introduced quickly
E)The monetary cost of manufacturing a life saving drug

Question

The figure below shows revenue and cost curves of a natural monopoly firm.Figure 14.1
​
  In the figure,
D: Demand curve
MR: Marginal revenue curve
MC: Marginal cost curve
ATC: Average total cost curve
-Which of the following is an example of the opportunity cost involved with social regulation?
A)The monetary costs of hiring administrative assistants to fill out OSHA safety reports 
B)The environmental costs of pollution control required under the Clean Air Act 
C)The monetary costs of laboratory trials required to try out a new drug 
D)The lives that are lost because new drugs are not introduced quickly 
E)The monetary cost of manufacturing a life saving drug

Quizplus · Accepted Answer

Opportunity cost refers to the benefits or values that are given up as a result of choosing one option over another. In the context of social regulation, the opportunity cost can include non-monetary aspects such as the lives lost because new drugs are not introduced quickly due to regulatory processes. This reflects the trade-off between ensuring drug safety through regulation and the potential benefits of quicker access to new treatments.

The Figure Below Shows Revenue and Cost Curves of a Natural